Landlords grow in confidence but lending remains tight

Permalink: Landlords grow in confidence but lending remains tight
by Gill Montia

Paragon’s latest Private Rented Sector Trends report proclaims a number of factors that point to strengthened landlord confidence in the third quarter of 2009.

According to the buy-to-let lender’s research, landlords expect the net value of their property portfolios to increase by an average 1% over the next 12 months, the first positive prediction for more than two years.

Furthermore, one third of landlords believe that tenant demand will grow over the next 12 months, with 57% expecting demand to remain stable.

The survey also reveals that landlords have been taking advantage of house price falls since the first quarter of 2007 and have been adding to their portfolios, albeit in small numbers.

Landlords owned an average of 12 properties by the third quarter of 2009, up from 11 at the beginning of 2007.

Ninety-three per cent of landlords questioned said that they had no plans to sell property, with 14% stating that they intend to buy further investment property.

However, Paragon warns “the continued mortgage famine and the threat of regulation of buy-to-let products looms over the sector”.

On finance, over half of landlords surveyed had attempted to obtain a buy-to-let mortgage in the three months to the end of September, for either a remortgage or a new purchase.

Of this group, 88.8% said it was more difficult to secure a loan than in the previous three months; 8.4% said they noticed no change and 2.8% stated they had found it slightly easier to secure a mortgage.